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<P class=lead align=left><FONT face="Times New Roman"><FONT size=6><B>The
Staggering Cost of Israel to Americans<FONT size=4><BR></FONT></B></FONT><FONT
size=4><BR><B>By Pamela Olson</B><BR><BR>April 02, 2013 </FONT></FONT><FONT
face="Times New Roman"><FONT size=4> </FONT></FONT></P>
<P class=lead align=left><FONT face="Times New Roman"><FONT size=4>Israel has a
population of approximately 7.8 million, or a million fewer than the state of
New Jersey. It is among the world's most affluent nations, with a per capita
income similar to that of the European Union.[1] Israel's unemployment rate of
5.6% is much better than America's 9.1%,[2] and Israel's net trade, earnings,
and payments is ranked 48th in the world while the US sits at a dismal
198th.[3]<BR><BR>Yet Israel receives approximately 10% of America's foreign aid
budget every year.[4] The US has, in fact, given more aid to Israel than it has
to all the countries of sub-Saharan Africa, Latin America, and the Caribbean
combined—which have a total population of over a billion people.[5] And foreign
aid is just one component of the staggering cost of our alliance with
Israel.<BR><BR>Given the tremendous costs, it is critical to examine why we
lavish so much aid on Israel, and whether it is worth Americans' hard-earned tax
dollars. But first, let's take a look at what our alliance with Israel truly
costs.<BR>Before the Iraq War in 2003<BR><BR><B>Direct Foreign
Aid</B><BR><BR>According to the Congressional Research Service , the amount of
official US aid to Israel since its founding in 1948 tops $112 billion, and in
the past few decades it has been on the order of $3 billion per year.[6](In
2011, for example, this amounted to over $8.2 million every single
day.)<BR><BR>But this money is only part of the story. For one thing, Israel
gets its aid money at the start of each year, unlike other nations.[7] This is
significant: It means Israel can start earning interest on the money right away.
And it costs the US more than the typical year-end disbursements because the US
government operates at a deficit, so it must borrow this money to pay Israel and
then pay interest on the amount all year.<BR><BR>Israel is also the only
recipient of US military aid that is allowed to use a significant portion
annually to purchase products made by Israeli companies instead of US companies.
(The costs to Americans caused by this unique perk are discussed
below.)<BR><BR>In addition, the US gives roughly $2 billion per year to Egypt
and Jordan in aid packages arranged largely in exchange for peace treaties with
Israel. The treaties don't include justice for Palestinians, and are therefore
deeply unpopular with the local populations.[8]<BR><BR>On top of this, the US
gives roughly half a billion to the Palestinian Authority each year,[9] much of
it used to rebuild infrastructure destroyed by Israel and to bolster an economy
stifled by the Israeli occupation.[10] This would be unnecessary if Israel were
to end the occupation and allow the Palestinians to build a functioning and
self-sustaining economy.<BR><BR>Yet there's still much more to the story,
because parts of US aid to Israel are buried in the budgets of various US
agencies, mostly the Department of Defense. For example, since at least 2006,
the American Defense budget has included between $130 and $235 million per year
for missile defense programs in Israel.[11]<BR><BR>In all, direct US
disbursements to Israel amount to approximately 10% of all U.S. aid abroad, even
though Israelis only make up 0.001% of the world's population. In other words,
on average, Israelis receive 10,000 times more US foreign aid per capita than
other people throughout the world, despite the fact that Israel is one of the
world's more affluent nations.[12] And that number rises significantly when one
considers disbursements to Egypt, Jordan, and the Palestinian Authority and
Defense spending on behalf of Israel.<BR><BR><B>Additional Ad hoc support for
Israel<BR></B><BR>Dr. Thomas Stauffer, a Harvard economist and Middle East
studies professor who twice served in the Executive Office of the President,
wrote a comprehensive report about all components of the alliance with Israel's
cost to American taxpayers for the Washington Report on Middle East Affairs in
2003. He wrote:<BR><BR>"Another element is ad hoc support for Israel, which is
not part of the formal foreign aid programs. No comprehensive compilation of US
support for Israel has been publicly released. Additional known items include
loan guarantees... special contracts for Israeli firms, legal and illegal[13]
transfers of marketable US military technology, de facto exemption from US trade
protection provisions, and discounted sales or free transfers of 'surplus' US
military equipment. An unquantifiable element is the trade and other aid given
to Romania and Russia to facilitate Jewish migration to Israel; this has
accumulated to many billions of dollars."[14]<BR><BR>Israel has often used its
privileged access to US military technology against both the US government and
US corporate interests. According to the Associated Press in 2002, "In France,
Turkey, The Netherlands and Finland, Israeli companies have edged such U.S.
firms as Raytheon, Northrop Grumman and General Atomics out of arms deals worth
hundreds of millions of dollars in recent years. The irony, experts say, is that
tens of billions of U.S. tax dollars and transfers of American military
technology helped create and nurture Israel's industry, in effect subsidizing a
foreign competitor."<BR><BR>The AP article quoted a vice president at the
Aerospace Industries Association of America, who bluntly said, "We give them
money to build stuff for themselves and the U.S. taxpayer gets nothing in
return."[15]<BR><BR>Meanwhile, according to the Christian Science Monitor ,
Israel has also "blocked some major US arms sales, such as F-15 fighter aircraft
to Saudi Arabia in the mid-1980s. That cost $40 billion over 10
years."[16]<BR><BR>Even worse, Israeli weapons "buttress the arsenals of nations
such as China that the United States considers strategic competitors, alarming
US military planners," the Associated Press article went on to report. "[In
2001] US surveillance planes flying along China's coast were threatened by
Chinese fighter jets armed with Israeli missiles... Had Chinese fighter pilots
been given the order to fire, they could have brought down the US planes with
Israeli Python III missiles... US defense chiefs say Israel sold China the
missiles without informing the United States."[17]<BR><BR>Lost jobs, trade, and
standing<BR><BR>One of the most devastating indirect costs of the US alliance
with Israel was the Arab oil boycott of 1973. The Arab states imposed the
boycott in protest of US support of Israel during the 1973 war, in which Arab
countries attacked Israel to try to reclaim lands Israel had invaded and
occupied in 1967.<BR><BR>"Washington's intervention triggered the Arab oil
embargo which cost the U.S. doubly: first, due to the oil shortfall, the US lost
about $300 billion to $600 billion in GDP; and, second, the US was saddled with
another $450 billion in higher oil import costs," wrote Stauffer in the
Washington Report on Middle East Affairs.[18]<BR><BR>Then there's the cost in
lost jobs. "US policy and trade sanctions reduce US exports to the Middle East
about $5 billion a year, costing 70,000 or so American jobs," Stauffer
estimates. "Not requiring Israel to use its US aid to buy American goods, as is
usual in foreign aid, costs another 125,000 jobs."[19]<BR><BR>But perhaps the
most damaging cost to the US has been its loss of standing in the Arab and
Muslim worlds, where US largesse towards Israel as it commits human rights
violations[20] provokes deep resentment. "To many of the world's Muslims, it
places the US taxpayer on the Israeli side of its conflicts with Arabs,"
observed the Associated Press article.[21]<BR><BR>According to Harvard professor
Stephen Walt, "The 9/11 Commission reported that 9/11 plotter Khalid Sheikh
Mohammed's 'animus toward the United States stemmed not from his experiences
there as a student, but rather from his violent disagreement with US foreign
policy favoring Israel.' Other anti-American terrorists—such as Ramzi Yousef,
who led the 1993 bombing of the World Trade Center—have offered similar
explanations for their anger toward the United States."[22]<BR><BR>There are
many more potential categories of costs that are even more difficult to
quantify. All in all, Stauffer estimates that Israel cost the US about $1.6
trillion between 1973 and 2003 alone—more than twice the cost of the Vietnam
war.[23]<BR>Costs since Stauffer's study in 2003<BR><BR>Israel's cost to
American taxpayers has remained high since Stauffer's 2003 study. The US
currently gives Israel an average of $3 billion a year in military aid, under an
agreement signed by the Bush administration to transfer $30 billion to Israel
over ten years, starting in 2009.[24]<BR><BR>All of the other extras and costs
remain and in some cases have increased since 2003. For example, "Despite a
tough economic climate and expected US budget cuts—including drastic cuts to the
US military budget—US lawmakers will provide $236 million in fiscal 2012 for the
Israeli development of three missile defense programs," reported Israeli
newspaper Haaretz.[25]<BR><BR>In addition, the US government "has provided $205
million to support the Iron Dome, manufactured by Israel's state-owned Raphael
Advanced Defense Systems Ltd. The system uses small radar-guided missiles to
blow up in midair Katyusha-style rockets with ranges of 3 miles to 45 miles, as
well as mortar bombs… Legislation moving through the Republican-controlled US
House of Representatives would give Israel additional $680 million for the Iron
Dome system through 2015."[26]<BR><BR>And if, as many experts believe, the US
would not have invaded Iraq without intense and sustained pressure from
Washington insiders who advocate actively on behalf of Israel,[27] this adds yet
another dimension of staggering cost to the equation: "hundreds of billions of
dollars, 4,000-plus U.S. and allied fatalities, untold tens of thousands of
Iraqi deaths, and many thousands of other US, allied, and Iraqi casualties,"
according to retired US foreign service officer Shirl McArthur.[28]<BR><BR>Nobel
Prize-winning economist Joseph Stiglitz and Harvard professor Linda Bilmes put
the cost of the Iraq War at over $3 trillion, and incalculably more if you take
into account the opportunity costs of the resources spent on this unproductive
war. For example, higher oil prices due to the war have had a devastating impact
on America's economy, and so have the surging federal debt and the servicing of
that debt. Without the war, the 2008 financial crisis almost certainly would not
have been as severe, and the Afghanistan war most likely would have been
shorter, cheaper, and more effective.[29]<BR><BR>The Israel lobby and partisans
are currently gunning for a war with Iran with the same zeal they showed in the
run-up to the 2003 invasion of Iraq.[30] By all estimates, the costs of a war
with Iran will be much higher than the Iraq war. In addition to the loss of
life, analysts predict, for example, that if Iran's oil production were taken
out of the world market, gas prices would rise 25-70 percent.<BR><BR>If the
Straits of Hormuz (straits adjacent to Iran through which 20% of the world's oil
production passes on a daily basis) were attacked or blockaded, the cost of oil
would skyrocket to a level never seen before, and the economic recession or
depression that followed would be nothing short of "apocalyptic," according to
Matthew Yglesias writing for Slate .[31]<BR>Reasons and Consequences<BR><BR>So
now we are back to the question of why America continues to pour money into a
state that commits daily human rights violations, defies US strategic
interests,[32] provokes rage and resentment among billions of people,[33]
competes with and crowds out US interests using technology subsidized by US
taxpayers, and sells America's military secrets to its enemies.[34]<BR><BR>The
answer is simple and summed up well by professors Stephen Walt and John
Mearsheimer in their ground-breaking article in the London Review of Books ,
"The Israel Lobby,"[35] and their book The Israel Lobby and US Foreign Policy
.[36]<BR><BR>"Why has the US been willing to set aside its own security and that
of many of its allies in order to advance the interests of another state?" the
article asks. "One might assume that the bond between the two countries was
based on shared strategic interests or compelling moral imperatives, but neither
explanation can account for the remarkable level of material and diplomatic
support that the US provides.<BR><BR>"Instead, the thrust of US policy in the
region derives almost entirely from domestic politics, and especially the
activities of the 'Israel Lobby.' Other special-interest groups have managed to
skew foreign policy, but no lobby has managed to divert it as far from what the
national interest would suggest, while simultaneously convincing Americans that
US interests and those of the other country—in this case, Israel—are essentially
identical."[37]<BR><BR>AIPAC, the American Israel Public Affairs Committee, is
consistently ranked in the top two most powerful lobbies in Washington.[38] And
it is only one arm of the much larger, multi-faceted, and well-financed Israel
lobby.[39]<BR><BR>According to Congressman Jim Moran, "AIPAC is very well
organized. The members are willing to be very generous with their personal
wealth. But it's a two edged sword. If you cross AIPAC, AIPAC is unforgiving and
will destroy you politically. Their means of communications, their ties to
certain newspapers and magazines, and individuals in the media are substantial
and intimidating. Every [Congress] member knows it's the best-organized national
lobbying force."[40]<BR><BR>Senator Joseph Lieberman proudly stated, "Any
attempt to pressure Israel, to force Israel to the negotiating table by denying
Israel support, will not pass in Congress… Congress will act against any attempt
to do that."[41]<BR><BR>It's true: The US Congress, along with the executive
branch, overwhelmingly support virtually any action or wish of the Israeli
government, no matter how at odds with US national interest or security,[42]
primarily because of the power of the Israel lobby.[43]<BR><BR>Even when two
AIPAC employees were indicted on espionage charges in 2005, and it was
determined that they had obtained classified US government information illegally
and passed it to Israeli agents, the charges were quietly dropped on
technicalities.[44] AIPAC fired both employees and issued a statement that they
were fired because their actions did not comport with AIPAC standards.[45] One
of the fired employees, Steven Rosen, filed a lawsuit for defamation, claiming
his actions were, in fact, common practice at AIPAC.[46]<BR><BR>When Israel
attempted to sink a U.S. Navy ship, the USS Liberty , in 1967, killing 34
Americans and injuring over 170, it still failed to put a dent in aid to
Israel.[47] Indeed, aid quadrupled the following year.[48]<BR><BR>Though
Congressmen receive payments and support from the lobby in exchange for their
loyalty, the American taxpayer is left footing the bill. As detailed above, the
total cost has run from a bare minimum of $112 billion since 1948 (the cost of
foreign aid alone) to $1.6 trillion or more, factoring in Defense
appropriations, oil crises, the sinking of the USS Liberty , the heightened risk
of terrorism, lost trade and co-opted technology, and countless other factors.
If the Iraq war and the increased risk of a war with Iran are factored in, the
cost skyrockets even higher.<BR><BR>Critics point out how much brighter our
future would be if we had invested these billions or trillions in veteran
rehabilitation and care, education, job creation, social security, housing,
environmental clean-up and prevention, roads, bridges, health care, and
scientific and health research. Or if Americans had simply held onto their tax
dollars and used them as they saw fit, in our own economy. If some of the higher
estimates are closer to the mark, our support for Israel could easily have
covered the $700 billion TARP bailout with a great deal left over for massive
stimulus spending and/or tax breaks.<BR><BR>If Israel were using these funds for
a good purpose, one could debate whether the price was worth it. But Israel uses
most of the money to prolong a 45-year military occupation (which regularly
involves gross violations of international law),[49] commit egregious human
rights violations,[50] and destroy billions of dollars worth of Palestinian
homes and infrastructure[51] (resulting in still more U.S. tax money being sent
to Palestinians to rebuild demolished homes, hospitals, and schools), while
building illegal Jewish-only settlements on Palestinian land.[52]<BR><BR>It
makes the prospect of peace ever more distant, creates dangerous hostility to
the US, placing Americans in peril, and puts the US Congress in violation of the
Arms Export Control Act,[53] all for the sake of campaign
contributions.<BR><BR>There is no good reason to keep throwing good money after
bad in a failed, ill-founded policy. It's long past time for a fundamental
rethinking of the American government's blank check to Israel.</FONT></FONT></P>
<P class=lead align=left><FONT face="Times New Roman"><FONT size=4><BR><EM>This
report was produced by </EM>If Americans Knew<EM> analysts, particularly Pamela
Olson, a President's Scholar at Stanford University 1998-2002 with a major in
Physics, a minor in Political Science, and 1600 GRE scores. Before coming to
IAK, Olson lived and worked in the West Bank; worked as a researcher in Moscow,
Siberia, and China; and was a research analyst at the Institute for Defense
Analysis. She is the author of </EM><A
href="http://www.amazon.com/Fast-Times-Palestine-Pamela-Olson/dp/0615456243/ref=cm_rdp_product">Fast
Times in Palestine</A><EM><A>. <BR><BR>This analysis updates the groundbreaking
1998 work by Richard Curtiss, </A></EM><A>"</A><A
href="http://ifamericansknew.org/stats/cost_of_israel.html" target=_blank>The
Cost of Israel to U.S. Taxpayers,</A>" <EM>published in the </EM>Washington
Report on Middle East Affairs<EM>. Mr. Curtiss, following military service in
World War II, served for 30 years as a career Foreign Service Officer. He
received the U.S. Information Agency's Superior Honor Award and the Edward R.
Murrow award for excellence in Public Diplomacy, USIA's highest professional
recognition. Upon retirement, Mr. Curtiss co-founded and the American
Educational Trust, which produces the </EM>Washington Report on Middle East
Affairs</FONT><EM><FONT size=4>. He is also the author of two books on
U.S.-Middle East relations. A more extensive bio can be read </FONT><A
href="http://www.wrmea.com/component/content/article/10960.html"><FONT
size=4>here.</FONT></A></EM></FONT></P></FONT></DIV></BODY></HTML>